They are all billion-dollar companies and some of the biggest brand names in the world. But all of them had humble beginnings. They were all started during times of economic turmoil or recession.
General Motors was started after the Panic of 1907 financial crisis. Burger King began as an affordable food joint in the 1950s after the Korean war. CNN first broadcasted on June 1st, 1980, when US inflation had hit 15 percent. And Airbnb was founded after the 2007-2008 financial crisis.
Moral of the story? While you are sitting there on your sofa sulking about losing your job or receiving a pay cut, someone else is out there seizing this opportunity and laying foundations for another billion-dollar company.
Five Ways a Recession is Beneficial to a Business Startup
I am going to give you five reasons why starting a business during a recessionary period might be quite beneficial:
1. Borrowing and financing becomes cheaper. During an economic slowdown the government usually cuts interest rates to boost economic activity. In 2020, interest rates were at zero percent in the United States, which meant anyone with good credit could go into a bank and secure an interest-free loan.
2. Top talent is available for hire. Many industries have shut down or downsized due to the Coronavirus, laying off valuable employees. There are many skilled people out there without a job that you can employ who can do wonders for your business.
3. Necessity is the mother of all innovation. With the Coronavirus gripping the world, whole new sets of problems were created. Businesses that were quickly able to capitalize on the opportunities to solve these problems were able to shine. New business models like online teaching and fitness, food and retail delivery emerged to fill the gaps created by the Coronavirus.
4. Competition is low. It is a great time to enter the market because the existing players are financially quite fragile due to losses incurred during the slowdown. This is a time when you can give even the biggest players in your industry some tough competition. You can position yourself as a leader in your industry, offering your customers value filled content, products, or services.
5. Negotiating power. Some small businesses might be available for sale due to owners facing financial problems. You might be able to secure an existing business for a dirt cheap price. Then you can apply your own magic and turn its financial performance around in a year or two.
Motivations of Starting a Business?
Why am I pushing you to start your own business ? There are certain advantages to owning your own business which you cannot enjoy working a nine to five job.
Gives your life a purpose. Having a business brings you more joy, contentment, and satisfaction in your life knowing that you work for yourself. There are no limits to what you can achieve. Think of it as building an asset which you can one day transfer to your kids when you retire.
Allows you to build the life you feel you and your family deserve to live. Are you currently living pay check to pay check? Many families are. Now is the time to get your family out of the rat race. Seize this opportunity that stands before you by operating your own business and creating the life your family deserves to live.
Allows you to shelter your hard-earned money. Businesses are given more tax breaks than employees. They are able to shelter their earnings from both inflation and taxes. By learning and understanding the tax laws, they are able to use them to their advantage. The tax laws were actually created for each and every one of us.
Allows you to build your own brand. Inventing a product or service that can potentially influence and change peoples’ lives for the better is a profound feeling. By starting a business you are putting yourself in a position to create a brand. You and your brand have the potential to change millions of peoples’ lives. There are businesses named after their owners that have an effect on you and your life today in some way. This of Wells Fargo, McDonalds, Baskin-Robbins, Hilton, Gucci, just to name a few. By creating your own business and brand you are creating a legacy. Whether you are doing it consciously or unconsciously. What will it say about you when you are gone?
Gives you control of deciding what happens to you and your family. When you work a job as someone’s employee, that job dictates not only your life, but your family’s life as well. Including your day to day schedule to your family vacation(s) and your living situation. By starting your own business, you are taking back control of your life and your family’s. You no longer need be at the mercy of your company or your boss.
Setting up a business does come with some initial struggles. You might even have people criticizing you and your business ideas. Thomas Edison's teachers said he was "too stupid to learn anything." He was fired from his first two jobs for being "non-productive." He certainly didn’t invent the light bulb on his first try. But look at how things turned out for him.
I never said it would be easy! Many people do not take the leap of faith due to this initial phase of uncertainty. They allow their fears of what could go wrong to stop them from reaching their greatest potential. Rather than worrying about what might go wrong, start to imagine what your life will look like when things go right.
My goal is to spend as much time offline as humanly possible. I have two little guys that demand my attention outside of work and am aware that you have little ones that are just as demanding as mine are. If we're not connected on Facebook, Instagram, YouTube or Twitter, be sure to find me there. I'm always down to connect and answer any questions, feel free to reach out to me and my team at email@example.com!
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Hi! I'm Asha.
Born and raised in South Carolina, I’m a country girl who’s passionate about making a difference in the world. I’m an obsessive learner who spends time reading, creating, and selling online educational programs for mothers.